Never Knew the Taxes the Corporation Paid

[Care4all]

This is a topic regarding a business/company, that was also a division of a corporation.

I was a Product Marketing Manager/Director for a specific strategic business unit, (sbu) of a company that was part of a major Corporation, doing about 1/3 of the total corporation's sales volume.

What this job entailed, was planning and delivering a specific area of business for the company, from developing the product, to developing a sales plan for the product, to delivering the expected initial markups/retail prices competitively, to the end gross margin profit, to a say in the quality of materials/ the buys for materials , to the buys at factories for the completed product, and every detail in the Marketing/Advertising strategies to sell the product to our customers, who then sold them at retail to their customers.... had to go to trade shows to be there to answer any questions regarding the product the big customers had on it.... when being shown the next season's line by their sales reps or vp's of our company if necessary....just every aspect of how my area of business was executed and delivered from planning my sales to making sure i came in to them by year end.

Basically, RUNNING A BUSINESS....

NOT ONCE was i told what tax bracket the company or corporation was in or how taxes were going up or down. These concerns were the concerns of the VP of Finance and the VP of the Tax division of the corporation.

They did not EVER come to me, or had any power over me or control over me, when it came to running the business.

and

Not once did I look at our stock price to see if i was doing a good job for the Company and making the Company money.

NOT ONCE when i was called in the CEO'S office to discuss my plans for my area of business or my performance of my area of business did we discuss the stock price of our corporation or the tax bracket the company was in or anything other than how my BUSINESS was doing....taxes and stock prices had NOTHING to do with how an actual business is doing, or it's potential for growth, or the lack there of...

So, WHY IS IT, that small business owners see taxes as such a critical part of the businesses they own, instead of concentrating how they can grow their businesses and leaving the tax decisions up to the tax accountant....?

I was always taught, working for a corporation, getting the business "right" was the most important thing...having the right product in the right numbers at the right price kind of thing would bring in the sales plan....you meet your sales plan and margin requirements, and pretty much, the business will be profitable...no matter the end taxes...

just wondering why a business run by a corporation would be so different than what it seems to be for small businesses?

care

 

[Skull Pilot]

You had absolutely no stake in that business. You did not risk your life savings and your retirement savings and indeed your family's future on that business.

After doing that, tell me you don't care if you get to keep more of the fruits of your labor and more of the rewards for your risks.

 

[Care4all]

You had absolutely no stake in that business. You did not risk your life savings and your retirement savings and indeed your family's future on that business.

After doing that, tell me you don't care if you get to keep more of the fruits of your labor and more of the rewards for your risks.

other than an employee stock purchase program, and the knowledge that i was a fiduciary of the owner's money. the stock holder's money....this is true....

but if i owned the business myself, i would have done NOTHING differently in running that business....the decisions on product and the marketing plan to drive the sales/demand of that product and all involved in the actual ''business'' of what i produced and sold... would not have changed an iota....

the tax guys might have moved something from one column to another or to some other country for all i knew, but they never ever, let it get in the way, of the vp's/directors in charge of coming in to a business plan.... they did not say, Care, you can't plan this business so aggressively, even if you know the opportunity is there, because it will put the company in to a higher tax bracket....they told me to GO FOR IT!

so, why would taxes make an owner become cowardly?

 

[Skull Pilot]

Taxes don't get in the way of a business plan. Taxes are hindrances on growth The less the government takes, the more for expansion, capital improvements etc. That is why business owners don't care for them

 

[Ravi]

You had absolutely no stake in that business. You did not risk your life savings and your retirement savings and indeed your family's future on that business.

After doing that, tell me you don't care if you get to keep more of the fruits of your labor and more of the rewards for your risks.

other than an employee stock purchase program, and the knowledge that i was a fiduciary of the owner's money. the stock holder's money....this is true....

but if i owned the business myself, i would have done NOTHING differently in running that business....the decisions on product and the marketing plan to drive the sales/demand of that product and all involved in the actual ''business'' of what i produced and sold... would not have changed an iota....

the tax guys might have moved something from one column to another or to some other country for all i knew, but they never ever, let it get in the way, of the vp's/directors in charge of coming in to a business plan.... they did not say, Care, you can't plan this business so aggressively, even if you know the opportunity is there, because it will put the company in to a higher tax bracket....they told me to GO FOR IT!

so, why would taxes make an owner become cowardly?

They don't. It's just something to whine about.

 

[Toro]

Care

Interesting post.

Perhaps the reason why you never focused on the after-tax profit and instead focused on getting the business correct was because that was your job. Corporations pay a great deal of money to finance whizzes and accountants to lower their tax bill. It is better that (talented) people such as yourself were focused on doing what you did best rather than focusing on taxes.

If you are a small business owner, you do not necessarily have the option to not focus on the taxes you pay. Of course, you are going to focus on growing your business, but many small business owners cannot afford to hire the finance whizzes to focus on getting their tax bills down..

Generally, the higher the taxes, the greater the cost and the less opportunity there is to expand your business and hire more people. That's why corporations spend so much to get their effective tax rate as close to zero as they can.

However, taxes are not usually or even primarily a driver of business decisions. For example, venture capitalists are located in two of the highest tax jurisdictions in America - Boston and northern California. The venture capitalists often require small growing firms they are funding to move to the Boston area or Silicon Valley to be near them because both places have acquired a critical mass conducive to venture growth, even though taxes are higher. After all, if taxes were the primary factor in business decisions, Mississippi would be rich and California would be poor.

Having said all that, however, generally lower taxes are better (as long as spending is lower) since corporations - big and small - are the primary drivers of wealth creation.

 

[Care4all]

Care

Interesting post.

Perhaps the reason why you never focused on the after-tax profit and instead focused on getting the business correct was because that was your job. Corporations pay a great deal of money to finance whizzes and accountants to lower their tax bill. It is better that (talented) people such as yourself were focused on doing what you did best rather than focusing on taxes.

If you are a small business owner, you do not necessarily have the option to not focus on the taxes you pay. Of course, you are going to focus on growing your business, but many small business owners cannot afford to hire the finance whizzes to focus on getting their tax bills down..

Generally, the higher the taxes, the greater the cost and the less opportunity there is to expand your business and hire more people. That's why corporations spend so much to get their effective tax rate as close to zero as they can.

However, taxes are not usually or even primarily a driver of business decisions. For example, venture capitalists are located in two of the highest tax jurisdictions in America - Boston and northern California. The venture capitalists often require small growing firms they are funding to move to the Boston area or Silicon Valley to be near them because both places have acquired a critical mass conducive to venture growth, even though taxes are higher. After all, if taxes were the primary factor in business decisions, Mississippi would be rich and California would be poor.

Having said all that, however, generally lower taxes are better (as long as spending is lower) since corporations - big and small - are the primary drivers of wealth creation.

They, the vp/comptroller of the company, the finance guys too.... were not even allowed near us, in Product development/Marketing....if the vp's in that area had a problem, they would have to go to the ceo and the ceo would go to the vp of marketing/development if he absolutely had to for some reason...but in general, we were the KINGS OF THE CASTLE....we made the decisions entirely, regarding the business...even cash flow of goods...and the finance guys had to make sure it came in to what we determined was right and okay....we chose the x factory dates of product, and the finance guys made sure they opened the letter of credit or whatever it took to get the goods here when we determined....we chose our inventory levels, our sales plan and even if we became overstocked with goods it was up to us to determine how and when to liquidate and what mark down dollars to spend on it so we could still come in to our gross margin and turn rate plan...

I do understand that a small business owner, may have to do everything themselves, so this is why they concern themselves with the taxes more, and that corporations have a whole team of people to help them in the tax areas of the business or dollar exchange rates in other countries we dealt with, or accounts payable things, but one thing that was a common saying was ... ''SALES Heel All Wounds'' and It's the Business, baby! It's not some tax bracket that you are in that makes your business bad, it's not having the right product at the right price...simple as that....

....make your darn sales plan and it is all but smooth sailing from there.... (yes you could miss your planned turn, or your planned margin in a tough season, but making your planned sales covers much of your fixed costs like overhead and the cost of paying those tax accountants and lawyers and specialists)

so, i guess i am thinking, that maybe small businesses need to focus more on the actual business itself, dot all i's cross all t's, buy the right stuff, get the best price and 'dating'for it through your wheeling and dealing, and taxes that you are going to have to pay on the profits some time down the road should become a secondary concern....

you could pay NOTHING in taxes if you wanted to...just run a crappy business that makes no profit, then tell me how important it is on what tax bracket you are now in with your individual income you draw from the business!!!

i realize taxes come in to play somewhere after the Fat Lady sings, and they can't be ignored and should be viewed as another aspect of the business that you dot your i's and cross your t's on, but not at the expence of losing sight of your actual business's opportunities in growth....

and this is what it appears is happening with some of the small business owners that have posted here lately and commented on in that silly article the other day, and.....i just thought they might need a little bit of advice or shaking up on that....so, thus my rant!


Care

 

[editec]

So, WHY IS IT, that small business owners see taxes as such a critical part of the businesses they own, instead of concentrating how they can grow their businesses and leaving the tax decisions up to the tax accountant....?

Ravi's right.

REAL small businesses aren't worried about taxes as much as these so called small business organizations (read shams pretending to speak for the small businesses, but actully speaking for very large "small businesses")

Most small business owners pay the same tax rates as everyone else.

Most small business owners are no where near the top tax rates, especially when they deduct every thing they possibly deduct as expenses.

Of course if they have a complaint, it's more likely how difficult it is for them to FILE their incomes taxes.

And for that complaint, I surely cannot blame them.

 

[Ravi]

you could pay NOTHING in taxes if you wanted to...just run a crappy business that makes no profit, then tell me how important it is on what tax bracket you are now in with your individual income you draw from the business!!!

Yep, that's basically it in a nutshell, Care.

Funny thing is...for most small businesses trying to avoid paying their share of taxes the answer is pretty easy. Either give more money to your employees or spend the money on business related write-offs...therefore stimulating the overall economy.

Or put the money in the bank, after taxes, and be thankful that you are the boss and not some idiot that runs his/her business into the ground.

 

[Skull Pilot]

So none of you can even contemplate that some of us believe that the government takes too much of what is rightfully ours?

"If you don't want to pay taxes, go out of business"

God, that's a moronic statement.

Here's an idea, if you enjoy paying taxes so much, get a better job or risk your life's savings on a business and put yourself in the top tax bracket. And then ask your beloved, benevolent government representative if they will raise your tax rate even more.

 

[Ravi]

So none of you can even contemplate that some of us believe that the government takes too much of what is rightfully ours?

No, probably everyone thinks that. But it doesn't mean it is true. The taxes we pay create a climate that allows us all to thrive. Sure there is a point where it would be too much of a burden but we've never been at that point.

"If you don't want to pay taxes, go out of business"

God, that's a moronic statement.

Doesn't mean it isn't true. I'm sure your competitors, if you have any, would be quite happy to pick up the slack.

Here's an idea, if you enjoy paying taxes so much, get a better job or risk your life's savings on a business and put yourself in the top tax bracket. And then ask your beloved, benevolent government representative if they will raise your tax rate even more.

If you've risked your life savings and end up in a higher tax bracket I'd say it was a well-calculated risk that worked out to your benefit...enabled by your fellow citizens living in a democratic republic.

Do you make a personal income of more than $250,000, Skull? If you are that worried about it I'm sure there are countries that have lower tax rates. Probably higher crime, sucky transportation and poorer people...but trade-offs are trade-offs.

 

[Care4all]

So none of you can even contemplate that some of us believe that the government takes too much of what is rightfully ours?

I think all of us feel we pay too much in taxes, and that you are not alone. I think our government wastes money as well and there is plenty of room for improvement.

"If you don't want to pay taxes, go out of business"

God, that's a moronic statement.

Yes it is moronic, that's the point of saying it.

Also, it was to note the sentiments of these 2 people, the lawyer and the dentist, in the other article regarding this, that basically said, that is what they would do to avoid reaching a higher tax level. That was completely MORONIC, yet ALL of you took their side in this other thread and supported these idiots that could never hold a business position in the business world with their kind of , defeatist attitude, if their life depended on it. I mean, Just give up if things get a little tougher for you attitude.... is for the BIRDS as far as I am concerned!!!!

Here's an idea, if you enjoy paying taxes so much, get a better job or risk your life's savings on a business and put yourself in the top tax bracket. And then ask your beloved, benevolent government representative if they will raise your tax rate even more.

Most all of us risk our life savings daily....supporting businesses by investing in them....through our 401k's in stock purchases, or mutual funds and in case you didn't notice, the risks we(the public) took, just made many of us LOSE EVERYTHING or HALF of everything we invested for the last 30 years in them...with absolutely NO ABILITY to even write off the losses...

You act as if the way you chose to invest your own money is suppose to be MY concern and whether you lose everything from your actions, my concern....? But you sit there and don't even acknowledge that YOU are NOT the only person in this world taking a risk with their own money, and YOU are not special Skull, you are not alone and you take no more risks with your money than many others in this country....

Life is NOT a sure thing, for any of us Skull....someone losing their job, their sole means of income is just as tragic as you losing your business....I don't understand why you, as a small business owner, believe you have something UP on the rest of the working folks out there....?

Honestly, i don't believe this is really what you and oreo and bern and whoever really think....but THIS IS THE WAY YOU COME OFF....

Yes, no one wants to pay more in taxes, this is very understandable....like i said, especially since there are so many places the gvt could cut and save money imo....but just because you are in business for yourself, and others are in the business of selling their own labor and skills for a salary, doesn't make you something "special", which as said, is the way you guys are coming off!

care

 

[Old Rocks]

Complaining about wasted taxpayer money is comendable. Stating that because you run a small business and risk your money, you should have to pay less than the rest of us is just whining. No, I do not run a small business. I am an industrial millwright, and every day I go to work, I do so in the knowledge that one mistake is all it takes to end my life or permantly cripple me. And I don't even have to be the one making the mistake. Should I get special tax breaks? I don't believe so.

Taxes are what we pay to live in a civilized society. You wish to avoid taxes, move to somewhere than does not have them. Otherwise, stop the whining. It just makes you sound like a lazy parasite.

 

[Skull Pilot]

So none of you can even contemplate that some of us believe that the government takes too much of what is rightfully ours?

I think all of us feel we pay too much in taxes, and that you are not alone. I think our government wastes money as well and there is plenty of room for improvement.





Yes it is moronic, that's the point of saying it.

Also, it was to note the sentiments of these 2 people, the lawyer and the dentist, in the other article regarding this, that basically said, that is what they would do to avoid reaching a higher tax level. That was completely MORONIC, yet ALL of you took their side in this other thread and supported these idiots that could never hold a business position in the business world with their kind of , defeatist attitude, if their life depended on it. I mean, Just give up if things get a little tougher for you attitude.... is for the BIRDS as far as I am concerned!!!!

I am pretty sure I didn't take anyone's side in another post. What I said was there are plenty of ways to keep taxable income below 250K while actually earning much more.

Here's an idea, if you enjoy paying taxes so much, get a better job or risk your life's savings on a business and put yourself in the top tax bracket. And then ask your beloved, benevolent government representative if they will raise your tax rate even more.

Most all of us risk our life savings daily....supporting businesses by investing in them....through our 401k's in stock purchases, or mutual funds and in case you didn't notice, the risks we(the public) took, just made many of us LOSE EVERYTHING or HALF of everything we invested for the last 30 years in them...with absolutely NO ABILITY to even write off the losses...

A bit of a difference. If a business fails chances are that business owner is living in his car. Your 401 takes a dive, you're still earning an income. Small business owners, and I'll concede a point to Editec here that what some call small business are actually quite large. For this discussion, I will call a small business as one with less than 100 employees.

Now if my retirement accounts tank but my business is still profitable I am fine but you have to see that a small business owner is taking on a lot more risk than an employee.

You act as if the way you chose to invest your own money is suppose to be MY concern and whether you lose everything from your actions, my concern....? But you sit there and don't even acknowledge that YOU are NOT the only person in this world taking a risk with their own money, and YOU are not special Skull, you are not alone and you take no more risks with your money than many others in this country....

Typical ad hominem. Where have I ever said that I am special or more important than anyone? All and I mean ALL of my arguments on taxation are based on lowering taxes for everyone. Not just business owners and not just people in specific income brackets.

But you and your ilk like to play your petty jealousies and class warfare that you can't see than an argument for lower taxes and less government spending is good for everyone.

Life is NOT a sure thing, for any of us Skull....someone losing their job, their sole means of income is just as tragic as you losing your business....I don't understand why you, as a small business owner, believe you have something UP on the rest of the working folks out there....?

Fuck you. Show me where I have ever said I have anything up on anyone. But I will say that until you have put your last cent on the line and that failure meant losing everything on your own idea, or labor or business that you won't understand. If my business goes under, i don't get to collect unemployment. If my business goes under, it's NOT just me, It's the my ten employees and their families.

And go ahead and insinuate that small business owner don't "work". I am willing to bet that most small business owners work more than their employees.

Honestly, i don't believe this is really what you and oreo and bern and whoever really think....but THIS IS THE WAY YOU COME OFF....

No, it's the way YOU infer what I say

Yes, no one wants to pay more in taxes, this is very understandable....like i said, especially since there are so many places the gvt could cut and save money imo....but just because you are in business for yourself, and others are in the business of selling their own labor and skills for a salary, doesn't make you something "special", which as said, is the way you guys are coming off!

care

Well if it's nothing special to open a business and provide jobs and services that better your community, why don't YOU do it?

It's no big deal, in fact it's exactly the same as working for someone else. And if someone is trading their hours for dollars, which is what you say is exactly the same as a small business owner's lot, then why are you in favor of a minimum wage?

You certainly would not support the government telling you that you had to pay a mandated price for my business services would you? After all that guy selling his labor is his business right? He should be able to work for whatever wage he can negotiate just like a business owner selling his product or services.

If that's your case, then I agree with you. Call every person selling their hours a small business and let the market work. Let them pay ALL their own taxes with no contributions from their customers who buy their labor after all, all they are selling is their one and only product, their labor.

So you see business owners and employees are NOT the same. You think they should be treated differently not me.

 

[Skull Pilot]

Complaining about wasted taxpayer money is comendable. Stating that because you run a small business and risk your money, you should have to pay less than the rest of us is just whining.

And where did I say that? Nice try. In fact business owners pay a chunk of YOUR taxes for YOU. And do you even thank them?

No, I do not run a small business. I am an industrial millwright, and every day I go to work, I do so in the knowledge that one mistake is all it takes to end my life or permantly cripple me. And I don't even have to be the one making the mistake. Should I get special tax breaks? I don't believe so.

But you do get special tax breaks. Your employer funds YOUR unemployment insurance, YOUR workman's comp insurance and half of your social security contribution.

So again, why aren't you for everyone being treated just like a small business. YOU sell your skills to a mill. YOU pay all your own taxes and all your own insurances etc. You will be a small business that sells one product, your skill as a millwright.

And again, I challenge you to find a post where I ever said a business owner should pay less taxes while you pay more.

Taxes are what we pay to live in a civilized society. You wish to avoid taxes, move to somewhere than does not have them. Otherwise, stop the whining. It just makes you sound like a lazy parasite.

Show me where I have said I want to pay NO taxes. You can't. All of my arguments for lower taxes and less intrusive and expensive government have been across the board for everyone. Not just for certain groups.

 

[xsited1]

This is a topic regarding a business/company, that was also a division of a corporation.

I was a Product Marketing Manager/Director for a specific strategic business unit, (sbu) of a company that was part of a major Corporation, doing about 1/3 of the total corporation's sales volume.

What this job entailed, was planning and delivering a specific area of business for the company, from developing the product, to developing a sales plan for the product, to delivering the expected initial markups/retail prices competitively, to the end gross margin profit, to a say in the quality of materials/ the buys for materials , to the buys at factories for the completed product, and every detail in the Marketing/Advertising strategies to sell the product to our customers, who then sold them at retail to their customers.... had to go to trade shows to be there to answer any questions regarding the product the big customers had on it.... when being shown the next season's line by their sales reps or vp's of our company if necessary....just every aspect of how my area of business was executed and delivered from planning my sales to making sure i came in to them by year end.

Basically, RUNNING A BUSINESS....

NOT ONCE was i told what tax bracket the company or corporation was in or how taxes were going up or down. These concerns were the concerns of the VP of Finance and the VP of the Tax division of the corporation.

They did not EVER come to me, or had any power over me or control over me, when it came to running the business.

and

Not once did I look at our stock price to see if i was doing a good job for the Company and making the Company money.

NOT ONCE when i was called in the CEO'S office to discuss my plans for my area of business or my performance of my area of business did we discuss the stock price of our corporation or the tax bracket the company was in or anything other than how my BUSINESS was doing....taxes and stock prices had NOTHING to do with how an actual business is doing, or it's potential for growth, or the lack there of...

So, WHY IS IT, that small business owners see taxes as such a critical part of the businesses they own, instead of concentrating how they can grow their businesses and leaving the tax decisions up to the tax accountant....?

I was always taught, working for a corporation, getting the business "right" was the most important thing...having the right product in the right numbers at the right price kind of thing would bring in the sales plan....you meet your sales plan and margin requirements, and pretty much, the business will be profitable...no matter the end taxes...

just wondering why a business run by a corporation would be so different than what it seems to be for small businesses?

care

Well.... I thank you for your honesty. You were an important cog in the wheel of a corporation and that's something to be proud of. As you know, jobs are specialized at every large corporation, so there would be no reason why you would care about the amount of taxes the corporation pays. I am, however, wondering why the stock price or EBITDA numbers were never discussed. These are important to any corporation, regardless of size.

Anyway, you seem to be mixing apples and oranges. Obviously, if taxes go up, money that would have gone to profits goes to the government. And a corporation needs to make a profit to stay in business, to grow and, my favorite, to give raises to employees. I'm sure it's obvious that small corporations cannot handle tax increases as well as large corporations, so the effect would be greater for them. So higher taxes mean slower growth, smaller raises and a more sluggish economy.

And if the taxes get too high, wealth will be transferred out of the country to avoid oppressive taxation. Many corporations (and individuals) have off-shore operations to handle oppressive taxation. This is true in many countries, not just the United States. One of the best ways to keep the wealth in any country and to improve the economy is to keep taxes (especially corporate taxes) low.

 

[Care4all]

I am pretty sure I didn't take anyone's side in another post. What I said was there are plenty of ways to keep taxable income below 250K while actually earning much more.





A bit of a difference. If a business fails chances are that business owner is living in his car. Your 401 takes a dive, you're still earning an income. Small business owners, and I'll concede a point to Editec here that what some call small business are actually quite large. For this discussion, I will call a small business as one with less than 100 employees.

Now if my retirement accounts tank but my business is still profitable I am fine but you have to see that a small business owner is taking on a lot more risk than an employee.



Typical ad hominem. Where have I ever said that I am special or more important than anyone? All and I mean ALL of my arguments on taxation are based on lowering taxes for everyone. Not just business owners and not just people in specific income brackets.

But you and your ilk like to play your petty jealousies and class warfare that you can't see than an argument for lower taxes and less government spending is good for everyone.



Fuck you. Show me where I have ever said I have anything up on anyone. But I will say that until you have put your last cent on the line and that failure meant losing everything on your own idea, or labor or business that you won't understand. If my business goes under, i don't get to collect unemployment. If my business goes under, it's NOT just me, It's the my ten employees and their families.

And go ahead and insinuate that small business owner don't "work". I am willing to bet that most small business owners work more than their employees.



No, it's the way YOU infer what I say



Well if it's nothing special to open a business and provide jobs and services that better your community, why don't YOU do it?

It's no big deal, in fact it's exactly the same as working for someone else. And if someone is trading their hours for dollars, which is what you say is exactly the same as a small business owner's lot, then why are you in favor of a minimum wage?

You certainly would not support the government telling you that you had to pay a mandated price for my business services would you? After all that guy selling his labor is his business right? He should be able to work for whatever wage he can negotiate just like a business owner selling his product or services.

If that's your case, then I agree with you. Call every person selling their hours a small business and let the market work. Let them pay ALL their own taxes with no contributions from their customers who buy their labor after all, all they are selling is their one and only product, their labor.

So you see business owners and employees are NOT the same. You think they should be treated differently not me.

All, I am saying, and justly so said on your part... i may have confused your statements on these other posts, with the comments of others on this topic, is that although small businesses do take risks with opening a business, there are ways for you to protect everything you took out of this business of profit on your individual basis....

YOU WILL NOT lose your home or everything you made off of this business if you go belly up, not if you set your self up correctly to protect yourself with an S-corp as example...so when you say you risk everything of your own, I still don't see it that way....if you could expound on it further, I may understand better, what you are trying to say.

On the unemployment thing, as I have said before to you, if you pay yourself a salary, you too qualify for unemployment as your employees would, so i see no risk there either...unless of course you decided to avoid SS taxes and U/E fees for yourself by taking your cut of the business only as profits, avoiding these other taxes....

If so, then the savings of only collecting profits and not collecting part of this money as salary and avoiding SS taxes.... should have allowed YOU to take this savings in tax money and put it away for the bad times you may have had to face down the road, like shutting the doors of your business.

As a business owner, your options are greater than the salaried person working a job, to avoid taxes or reduce your tax load. I see this as an advantage business owners deserve for employing others.

And I do understand the less of their tax load, the better.

BUT THIS IS THE CASE, with EVERYONE....no?

I want to be able to keep more of my taxable income for myself, just as you do....this is where YOU are no different than the next guy....

I don't think business owners are some elite class that deserve more of a tax break than the next guy on his own personal and individual income taxes just because he is investing money in to a venture that could make him rich, or break him....

Care

 

[editec]

EFverybody wants the civil society that comes with having governments, but nobody wants to pay for it.

Nothing new about that, I think.

 

[Care4all]

This is a topic regarding a business/company, that was also a division of a corporation.

I was a Product Marketing Manager/Director for a specific strategic business unit, (sbu) of a company that was part of a major Corporation, doing about 1/3 of the total corporation's sales volume.

What this job entailed, was planning and delivering a specific area of business for the company, from developing the product, to developing a sales plan for the product, to delivering the expected initial markups/retail prices competitively, to the end gross margin profit, to a say in the quality of materials/ the buys for materials , to the buys at factories for the completed product, and every detail in the Marketing/Advertising strategies to sell the product to our customers, who then sold them at retail to their customers.... had to go to trade shows to be there to answer any questions regarding the product the big customers had on it.... when being shown the next season's line by their sales reps or vp's of our company if necessary....just every aspect of how my area of business was executed and delivered from planning my sales to making sure i came in to them by year end.

Basically, RUNNING A BUSINESS....

NOT ONCE was i told what tax bracket the company or corporation was in or how taxes were going up or down. These concerns were the concerns of the VP of Finance and the VP of the Tax division of the corporation.

They did not EVER come to me, or had any power over me or control over me, when it came to running the business.

and

Not once did I look at our stock price to see if i was doing a good job for the Company and making the Company money.

NOT ONCE when i was called in the CEO'S office to discuss my plans for my area of business or my performance of my area of business did we discuss the stock price of our corporation or the tax bracket the company was in or anything other than how my BUSINESS was doing....taxes and stock prices had NOTHING to do with how an actual business is doing, or it's potential for growth, or the lack there of...

So, WHY IS IT, that small business owners see taxes as such a critical part of the businesses they own, instead of concentrating how they can grow their businesses and leaving the tax decisions up to the tax accountant....?

I was always taught, working for a corporation, getting the business "right" was the most important thing...having the right product in the right numbers at the right price kind of thing would bring in the sales plan....you meet your sales plan and margin requirements, and pretty much, the business will be profitable...no matter the end taxes...

just wondering why a business run by a corporation would be so different than what it seems to be for small businesses?

care

Well.... I thank you for your honesty. You were an important cog in the wheel of a corporation and that's something to be proud of. As you know, jobs are specialized at every large corporation, so there would be no reason why you would care about the amount of taxes the corporation pays. I am, however, wondering why the stock price or EBITDA numbers were never discussed. These are important to any corporation, regardless of size.

Anyway, you seem to be mixing apples and oranges. Obviously, if taxes go up, money that would have gone to profits goes to the government. And a corporation needs to make a profit to stay in business, to grow and, my favorite, to give raises to employees. I'm sure it's obvious that small corporations cannot handle tax increases as well as large corporations, so the effect would be greater for them. So higher taxes mean slower growth, smaller raises and a more sluggish economy.

And if the taxes get too high, wealth will be transferred out of the country to avoid oppressive taxation. Many corporations (and individuals) have off-shore operations to handle oppressive taxation. This is true in many countries, not just the United States. One of the best ways to keep the wealth in any country and to improve the economy is to keep taxes (especially corporate taxes) low.

Obviously the Corporation knows what tax bracket or what tax percentage it will pay on it's total earnings, when all is said and done....

This estimate, along with estimates of frieght and duties and the the overhead of the entire company is incorporated in to my initial markup of the product...as with most businesses, the customer buying the product, in general, pays the taxes of the business....along with all costs of the business including the cost of goods, advertising costs, overhead costs, payroll,etc and what estimated taxes that will be paid in the end...

The business itself covers this in the initial mark up of the product....even estimated seasonal markdowns are calculated so that all of these costs are estimated and included in to the initial mark up of the product... if the product could not substantiate the retail it took to achieve that mark up, then we went back to the factory and worked deals for a better cost on it, or stripped something out of the product to get to the saleable retail price at the appropriate margin or we decided not to carry the product if it was not saleable at the retail we felt could do volumes....or we ate the margin requirement and bought the hell out of it anyway, hoping to make the return on investment back in a faster turn over rate...faster sale of it, with alot more of the product on hand to sell.... options are endless really...

we didn't review stock prices because they fluctuated daily and they were not a part of the business... we knew how well we were doing, by how well we were making our sales plan....everything of the business, was incorporated and calculated in our own business plan...for the product.

Care

 

[Ravi]

Well.... I thank you for your honesty. You were an important cog in the wheel of a corporation and that's something to be proud of. As you know, jobs are specialized at every large corporation, so there would be no reason why you would care about the amount of taxes the corporation pays. I am, however, wondering why the stock price or EBITDA numbers were never discussed. These are important to any corporation, regardless of size.

Anyway, you seem to be mixing apples and oranges. Obviously, if taxes go up, money that would have gone to profits goes to the government. And a corporation needs to make a profit to stay in business, to grow and, my favorite, to give raises to employees. I'm sure it's obvious that small corporations cannot handle tax increases as well as large corporations, so the effect would be greater for them. So higher taxes mean slower growth, smaller raises and a more sluggish economy.

And if the taxes get too high, wealth will be transferred out of the country to avoid oppressive taxation. Many corporations (and individuals) have off-shore operations to handle oppressive taxation. This is true in many countries, not just the United States. One of the best ways to keep the wealth in any country and to improve the economy is to keep taxes (especially corporate taxes) low.

I think Care's point was, and correct me if I'm wrong Care, that it was her job to make her employer as profitable as possible. No one ever told her to bring in less money because of a tax burden. How stupid would it be if the CEO said, "Oh, dear, we are making too much money, slow down everyone and let us become less profitable so Uncle Sam doesn't get a cut!!!"

The only person normally effected by taxes in the small business world are the actual owners of the company. So while it may mean a smaller profit for the owner it won't effect the company itself.

Off-shoring your profits is basically just ripping the country off.